Microsoft pressured to ally with Yahoo?

— 2:43 PM on May 3, 2006

eWEEK reports on a Wall Street Journal story that claims Microsoft has held discussions to form an alliance with rival search company Yahoo. Microsoft reportedly contemplated either buying a chunk of Yahoo or selling its MSN network to the company and keeping a minority stake. The talks have since died down, but Microsoft is still said to be open to the idea, especially considering growing pressure from shareholders to boost MSN Search past its feeble 13.2% market share. Yahoo is currently the second most popular search engine with 28% of the market. Combined, MSN and Yahoo would add up to 41.2%, only 1.5% below Google's 42.7%. Microsoft also held talks to partner up with AOL last year, but that effort was thwarted by Google's purchase of a 5% stake in AOL last December.

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